I've been in sales for a very long time now. I remember my first sales job was a very grueling one. During the first few months, I really worked very hard trying to get things going. It seemed like I was never going to get anywhere but I wouldn't give up. And then, one day something gave and orders started coming in. I'll never forget my sales manager looking at me and saying, "See what a difference a day can make"?
Houston was beginning to shift into a buyer's market. Some areas, mostly outside of the loop, were feeling it the most. The innerloop was getting it but not as much. And homes over $500K seemed to be doing the best.
It looks like Hurricane Ike is going to change all that. It will take a few days for Realtors to be able to assess their inventory and determine which homes are still in tact and which ones aren't. And as we wait for power to come on some Realtors are out of commission.
More significantly, some of Houston's available inventory has been damaged and will have to be taken off the market. That definitely lowers the supply of housing. I've received a few calls from displaced home owners needing housing in Houston.
If you are a buyer, don't wait too long to get started, you don't want to find yourself in a bidding war over property.
Wednesday, September 17, 2008
Monday, September 15, 2008
Houston after Hurricane Ike
Well, it finally happened. Houston's luck ran out and we got hit by a hurricane. Luckily, I suffered no damage to my home and I have power.
As Houston begins to dust itself off and continue moving on, neighbors to the southeast are not so lucky. Many of them have lost their homes and are displaced. This is going to change Houston's housing market and I predict housing demand will increase. I suspect the area the most stressed will be the inner loop area close to downtown or close to freeways. Displaced homeowners still need to commute and will want to be close to freeways.
Add this to the existing demand from people transferring into Houston and I believe we are very well heading towards a seller's market. I remember hearing reports after Hurricane Katrina devastated New Orleans that bidding wars took place for houses in Baton Rouge. It is quite possible that Houston can see similar activity. However, due to the massive size of Houston, I believe we will see this type of activity in pockets of Houston.
It never ceases to amaze me how things can change in Real Estate in just a matter of 24 hours.
As Houston begins to dust itself off and continue moving on, neighbors to the southeast are not so lucky. Many of them have lost their homes and are displaced. This is going to change Houston's housing market and I predict housing demand will increase. I suspect the area the most stressed will be the inner loop area close to downtown or close to freeways. Displaced homeowners still need to commute and will want to be close to freeways.
Add this to the existing demand from people transferring into Houston and I believe we are very well heading towards a seller's market. I remember hearing reports after Hurricane Katrina devastated New Orleans that bidding wars took place for houses in Baton Rouge. It is quite possible that Houston can see similar activity. However, due to the massive size of Houston, I believe we will see this type of activity in pockets of Houston.
It never ceases to amaze me how things can change in Real Estate in just a matter of 24 hours.
Friday, September 5, 2008
Houston - An Investor's Paradise
Houston is in a very unique position right now. Perhaps this is the case throughout the U.S. but since I practice Real Estate here in Houston, I can speak only for Houston.
We're running low on rental property.
In recent years, out of town investors were lured to our fair city and encouraged to pay astronomical prices for property only to discover that the lease revenue they were promised didn't deliver. What was the problem?
The problem was that it was a seller's market. The demand for property was high and the number of qualified buyers was high. Everyone qualified to buy, so if a lessee felt the asking lease price of a property was too high, they negotiated the price down. The landlords had no choice but to comply.
The tables are turned now. Fewer people are being qualified for loans and there is some uncertainty regarding how the economic woes this nation is facing will affect Houston. So, that means we have a greater number of people needing to lease property. And since these lessees no longer have that buying power, they no longer have negotiating leverage. Additionally, there isn't enough rental property to meet the demand. This is especially the case in the inner loop area.
There is another goody in it for the today's investor. Since we have fewer qualified buyers chasing a high volume of available property, it's a buyer's market. So, not only can an investor get a piece of property at a really good price right now, one can lease it and expect top dollar for it.
There are still very nice affordable neighborhoods inside Houston's inner loop that are worth exploring. An effective strategy would be to purchase a few homes, invest for minor upgrades, lease for a few years and then sell when the economy picks up.
We're running low on rental property.
In recent years, out of town investors were lured to our fair city and encouraged to pay astronomical prices for property only to discover that the lease revenue they were promised didn't deliver. What was the problem?
The problem was that it was a seller's market. The demand for property was high and the number of qualified buyers was high. Everyone qualified to buy, so if a lessee felt the asking lease price of a property was too high, they negotiated the price down. The landlords had no choice but to comply.
The tables are turned now. Fewer people are being qualified for loans and there is some uncertainty regarding how the economic woes this nation is facing will affect Houston. So, that means we have a greater number of people needing to lease property. And since these lessees no longer have that buying power, they no longer have negotiating leverage. Additionally, there isn't enough rental property to meet the demand. This is especially the case in the inner loop area.
There is another goody in it for the today's investor. Since we have fewer qualified buyers chasing a high volume of available property, it's a buyer's market. So, not only can an investor get a piece of property at a really good price right now, one can lease it and expect top dollar for it.
There are still very nice affordable neighborhoods inside Houston's inner loop that are worth exploring. An effective strategy would be to purchase a few homes, invest for minor upgrades, lease for a few years and then sell when the economy picks up.
Wednesday, August 13, 2008
Short Sale or Foreclosed properties - which to buy?
Many homeowners in Houston are facing foreclosure. So, in a last ditch effort to save their credit they are opting to "short sale" their property. This scenario offers a really nice inventory of unbelievable deals to the average consumer.
What is a Short Sale? A short sale occurs as follows. Let's assume you have a house note with a balance of about $300,000 and you can no longer make the payments. The market value of your property has dropped and you can't sell it for more than $200,000. So you ask your bank if they will allow you to sell your property "short" of what you owe. That's the short and skinny of it but there is more to it. If you are in a situation where you think you might need to do a short sale, contact an attorney and an agent.
Why would a bank agree to a short sale? A couple of reasons. If the property goes into foreclosure, the bank will have to pay out more in legal fees and lost opportunity than if they allowed the borrowers the opportunity to short sale the property. Another concern is that the borrower t might file for bankruptcy. Apparently that can completely stall the bank's ability to seize the property and it could take a lot longer before the bank could recoup any money.
What's the difference between buying a property that is foreclosed on and one that is being offered as a short sale?
For the sake of this article, the foreclosures we are referring to are Bank Owned REO properties. This type property usually has a clear title. That means that the bank has already paid off the taxes and other liens against the property in order to facilitate a smooth sale.
When dealing with a property that is selling as a short sale, more than likely the seller has defaulted on property taxes and HOA fees as well as mortgage payments. Those liens are cleared at the closing table when the sale is closed.
The devil isn't in the liens, the devil is in the process. Banks have been foreclosing on properties since the beginning of time. It's an easy breezy process. What's new today is the volume of foreclosures. It's expensive and they can save money by agreeing to do short sales. The problem here is that banks just don't have a lot of experience in the process of a short sale. They are blindsided by the problem and don't know what they're doing. The result is a very very long process with many delays and lost documents once an offer is put on the table.
I recently spoke to a bank loss and mitigation agent that handles short sales for the Texas region and she is managing 170 files at one time. She told me that she's got a light load compared to most in her company. Others carry as many as 250. She indicated that she had files that had offers as far back as September '07 that she had not yet closed on.
This isn't true with every bank but short sales are becoming a nightmare for many agents. And what's worse is after all the hard work is done in submitting a sale and then persistently closing the deal, the lender may decide to cut back a hefty portion of the Realtor's commission.
If you are in a hurry and want a smoother process, you may want to consider buying a home that is already foreclosed on and pass on the one that is available as a short sale.
What is a Short Sale? A short sale occurs as follows. Let's assume you have a house note with a balance of about $300,000 and you can no longer make the payments. The market value of your property has dropped and you can't sell it for more than $200,000. So you ask your bank if they will allow you to sell your property "short" of what you owe. That's the short and skinny of it but there is more to it. If you are in a situation where you think you might need to do a short sale, contact an attorney and an agent.
Why would a bank agree to a short sale? A couple of reasons. If the property goes into foreclosure, the bank will have to pay out more in legal fees and lost opportunity than if they allowed the borrowers the opportunity to short sale the property. Another concern is that the borrower t might file for bankruptcy. Apparently that can completely stall the bank's ability to seize the property and it could take a lot longer before the bank could recoup any money.
What's the difference between buying a property that is foreclosed on and one that is being offered as a short sale?
For the sake of this article, the foreclosures we are referring to are Bank Owned REO properties. This type property usually has a clear title. That means that the bank has already paid off the taxes and other liens against the property in order to facilitate a smooth sale.
When dealing with a property that is selling as a short sale, more than likely the seller has defaulted on property taxes and HOA fees as well as mortgage payments. Those liens are cleared at the closing table when the sale is closed.
The devil isn't in the liens, the devil is in the process. Banks have been foreclosing on properties since the beginning of time. It's an easy breezy process. What's new today is the volume of foreclosures. It's expensive and they can save money by agreeing to do short sales. The problem here is that banks just don't have a lot of experience in the process of a short sale. They are blindsided by the problem and don't know what they're doing. The result is a very very long process with many delays and lost documents once an offer is put on the table.
I recently spoke to a bank loss and mitigation agent that handles short sales for the Texas region and she is managing 170 files at one time. She told me that she's got a light load compared to most in her company. Others carry as many as 250. She indicated that she had files that had offers as far back as September '07 that she had not yet closed on.
This isn't true with every bank but short sales are becoming a nightmare for many agents. And what's worse is after all the hard work is done in submitting a sale and then persistently closing the deal, the lender may decide to cut back a hefty portion of the Realtor's commission.
If you are in a hurry and want a smoother process, you may want to consider buying a home that is already foreclosed on and pass on the one that is available as a short sale.
Rice Military - What is it
I get that question a lot.
Rice Military is a neighborhood in Houston that is just east of Memorial. It has become a popular area due to the new town homes and patio homes that are popping up throughout.
I am unsure of the actual technical boundaries but would define it as the area between Shepherd and Westcott, and Memorial and I-10. The area just South of Washington is established; as you venture North of Washington you'll find gentrification and the area is not as established but the new homes are beautiful.
According to the Greater Houston Preservation Alliance this area was the site of a military facility called Camp Logan in the early 1900's. The land itself was donated by J.S. and W.M. Rice whose estate also contributed to Rice University. There are no real historical "markers" remaining in the area to give one a clue regarding the presence of the camp. Nor does the area have any type of "military" feel to it.
Rice Military is a neighborhood in Houston that is just east of Memorial. It has become a popular area due to the new town homes and patio homes that are popping up throughout.
I am unsure of the actual technical boundaries but would define it as the area between Shepherd and Westcott, and Memorial and I-10. The area just South of Washington is established; as you venture North of Washington you'll find gentrification and the area is not as established but the new homes are beautiful.
According to the Greater Houston Preservation Alliance this area was the site of a military facility called Camp Logan in the early 1900's. The land itself was donated by J.S. and W.M. Rice whose estate also contributed to Rice University. There are no real historical "markers" remaining in the area to give one a clue regarding the presence of the camp. Nor does the area have any type of "military" feel to it.
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